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Treiber
Citation Treiber & Straub, Inc. v. United Parcel Service, Inc., 2005 WL 2108081 (E.D. Wis. Aug. 31, 2005), aff'd in part, mod'd in part, 474 F.3d 379 (7th Cir. 2007) (full-text). Factual Background Plaintiff, Treiber & Straub, Inc., a fine-jewelry store in Wisconsin, attempted to return a diamond ring valued at $105,000 to their wholesale supplier in California. Plaintiff utilized the defendant, United Parcel Service's (UPS) online “Next Day Air” option to return the ring. As part of the transaction, Treiber & Straub also purchased insurance in the amount of $50,000, the maximum permitted by UPS. Plaintiffs initiated the shipping process by going on UPS’s website. As part of utilizing UPS’s online shipping service, Plaintiff had to indicate that they agree to the “UPS Terms and Conditions” (the “Terms”) by clicking on a box on the screen. The relevant portion of the Terms stated: Treiber & Straub shipped the ring on September 15, 2003, but the ring never arrived at the wholesaler's California office. On September 30, 2003, UPS acknowledged the ring was lost but disclaimed liability under the Terms because the ring’s actual value exceeded $50,000. As a result of UPS’s refusal to honor the $50,000 insurance policy, plaintiff’s brought suit on both federal and state law claims. Trial Court Proceedings At trial, the district court granted UPS’s motion for summary judgment. The district court found that the disclaimers on UPS’s website gave reasonable notice to customers that shipping “articles of unusual value” via UPS was prohibited. The district court relied on language that was presented before the plaintiff on two separate occasions, both of which read: “excess value insurance does not provide any insurance protection for package or letters having an actual value of more than $50,000, even if a lesser amount is specified in the insured value field in the UPS shipping system used.” The court observed that granting the defendant's motion for summary judgment was proper because the burden of proving notice was not on the defendant and “failure of the plaintiff to read the matter plainly placed before it cannot overcome the presumption that the plaintiff assented to the terms of the carrier.” Additionally, the trial court declined to reach the plaintiff's state law claim that alleged the defendant breached the shipping contract when it failed to honor the $50,000 insurance policy. In dismissing the case without prejudice, the district court declared that it lacked jurisdiction to hear the claim when it rejected UPS’s argument that the claim arose under federal law because of field preemption. Both Treiber & Straub and UPS appealed the trial court's decision. Appellate Court Proceedings On appeal, the Seventh Circuit court affirmed the lower court’s grant of summary judgment for UPS. In arriving at its decision, the appellate court analyzed whether the Terms found on the UPS website were “clear and conspicuous” so as to provide adequate notice to the plaintiff. The court's examination of the relevant pages from UPS’s website showed adequate notice that it did not permit items of “unusual value” to be shipped to all customers. This language was not only included on the air bill, but was also agreed upon twice by the plaintiff when the order was being placed. The court reasoned that the plaintiff’s argument that the Terms were “buried among all the other extensive terms and conditions” were outweighed by the fact that, before sending an item worth more than $100,000, the plaintiff should have taken the time to examine all the provision of the Terms. Since adequate notice was given, the district courts grant of summary judgment was proper. In addition, the Seventh Circuit modified the district court's dismissal of plaintiff's breach-of-contract claim from being dismissed without prejudice to being dismissed with prejudice. The court of appeals reasoned that the plaintiff’s breach-of-contract claim was only nominally about a shipper seeking enforcement of a contract. Instead, the court concluded that the plaintiff wanted to use state law to avoid certain parts of the contract (i.e. limitation of liability by defendant) while enforcing other portions of the same contract. The court ruled that allowing the claim to be heard would amount to an “enlargement contracts based on state laws or policies external to the agreement.” The court held that the state law breach of contract theory was preempted and thus should be dismissed with prejudice. Category:Case Category:Case-U.S.-Federal Category:Case-U.S.-Contract Category:Contract